Charlie is definitely right about ground loops. These can be nasty little buggers in car audio, and I have even experienced ground loop noise when connecting my computer to my receiver for MP3s. A separate ground shield is great for noise rejection, but only when it doesn't induce its own ground loops. Having a "directional" cable with a single-ended ground shield is specifically designed to eliminate any potential ground loops (at least through the shield, that is). Eliminating ground loops is also the main reason for using differential circuitry – a kind of quasi balanced design.

Some high-end audio is using balanced XLR connections between components. The likes of Krell, Conrad-Johnson, etc have some balanced preamps and amps. I think one reason more audio companies don't use balanced connections is that the benefits of a balanced line cable are only fully realized on longer cable runs. If you're talking about a 0.5-meter cable, I don't think it makes much difference between balanced and non-balanced. I would be interested to know if any high-end amplifiers are using a differential or "balanced differential" input circuit instead of common-ground circuitry. I think AudioControl uses balanced differential circuitry in their equalizers and such. It seems that the benefits realized in car audio would apply to home audio as well, but I guess that home audio doesn't have many problems with ground loops or EMI.

I also wonder if RCA actually invented the "RCA" connector. Anybody know? If RCA didn't invent it, then should we rename the connector? How about calling it "Nubbin" or "The Doohickey Connector"?